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Improving governance on nature-related risks and opportunities

The Commonwealth Climate and Law Initiative (CCLI) has partnered with the Climate Governance Initiative and the World Benchmarking Alliance (WBA), to publish a briefing for board directors on the Climate Governance Hub.  

This briefing explores how companies are currently integrating nature considerations into their strategies by analysing six of the Nature Benchmark indicators (a 2022 – 2023 study assessing 769 companies), and outlines how board directors can improve governance on nature-related risks and opportunities. 

The briefing, which explains how each of the Nature Benchmark indicators is relevant to directors’ duties, is timely in the context of a recently published independent UK legal opinion. The opinion’s expert authors concluded that directors should consider their company’s nature-related risks as part of their duties to promote the success of the company and act with reasonable care, skill and diligence. Failing to do so could result in legal claims that such duties have been breached. Whilst this opinion was specific to English law, its conclusions are likely to be relevant to company directors in many countries (see CCLI’s global report on this topic and expert opinions from Australia and New Zealand).

With evidence showing that most companies do not robustly assess their impacts and dependencies on nature, this briefing outlines how directors could approach nature-related risks to meet their legal duties. 

Five steps board directors can take towards a coherent approach to meet their legal duties to govern nature-related risks and align with the WBA’s Nature Benchmark:

  • Embed sustainability deeply and holistically within overall company strategy to thrive in the nature-positive transition;
  • Integrate nature into oversight and incentive mechanisms and boost board and executive expertise to lead with a positive transition mindset;
  • Bridge meaningful stakeholder engagement with sustainability strategies through target setting and risk management;
  • Tackle potential blind spots and avoid missed opportunities with robust assessment of nature-related impacts and dependencies;
  • Step up efforts to achieve ecosystem conversion-free supply chains and identify profitable alternatives.